Hub Group, Inc. Reports First Quarter 2015 Earnings per Share of $0.32 Excluding One-time Costs

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

Three Months

Ended March 31,

2015

2014

Revenue

$ 835,941

$ 848,449

Transportation costs

746,813

759,705

Gross margin

89,128

88,744

Costs and expenses:

Salaries and benefits

39,476

37,092

Agent fees and commissions

14,826

13,666

General and administrative

14,071

15,432

Depreciation and amortization

1,960

2,058

Total costs and expenses

70,333

68,248

Operating income

18,795

20,496

Other income (expense):

Interest expense

(741)

(407)

Interest and dividend income

6

14

Other, net 

(1,404)

(205)

Total other expense 

(2,139)

(598)

Income before provision for income taxes

16,656

19,898

Provision for income taxes

6,380

7,863

Net income

$  10,276

$  12,035

Basic earnings per common share

$      0.28

$      0.33

Diluted earnings per common share

$      0.28

$      0.33

Basic weighted average number of shares outstanding

36,156

36,661

Diluted weighted average number of shares outstanding

36,169

36,724

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended March 31, 2015

Hub

Mode

Inter-Segment Elims

Hub Group Consolidated

Revenue

$ 643,443

$ 213,522

$         (21,024)

$      835,941

Transportation costs

580,258

187,579

(21,024)

746,813

Gross margin

63,185

25,943

–

89,128

Costs and expenses:

Salaries and benefits

35,660

3,816

–

39,476

Agent fees and commissions

15

14,811

–

14,826

General and administrative

12,198

1,873

–

14,071

Depreciation and amortization

1,618

342

–

1,960

Total costs and expenses

49,491

20,842

–

70,333

Operating income

13,694

5,101

–

18,795

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended March 31, 2014

Hub

Mode

Inter-Segment Elims

Hub Group Consolidated

Revenue

$ 653,409

$ 208,906

$         (13,866)

$      848,449

Transportation costs

588,912

184,659

(13,866)

759,705

Gross margin

64,497

24,247

–

88,744

Costs and expenses:

Salaries and benefits

33,337

3,755

–

37,092

Agent fees and commissions

11

13,655

–

13,666

General and administrative

13,739

1,693

–

15,432

Depreciation and amortization

1,517

541

–

2,058

Total costs and expenses

48,604

19,644

–

68,248

Operating income

15,893

4,603

–

20,496

HUB GROUP, INC.

UNAUDITED NON-GAAP TO GAAP RECONCILIATION

(earnings per share)

Three Months

Ended, March 31,

Change

Change

2015

2014

$

%

Diluted GAAP EPS

$    0.28

$    0.33

$   (0.05)

-15.2%

Canadian currency translation loss, net of tax

0.02

–

0.02

Severance costs, net of tax

0.02

–

0.02

Diluted non-GAAP EPS (adjusted)

$    0.32

$    0.33

$   (0.01)

-3.0%

Diluted shares

36,169

36,724

HUB GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

March 31,

December 31,

2015

2014

(unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$    129,261

$       109,769

Accounts receivable trade, net

409,506

401,803

Accounts receivable other

14,299

24,886

Prepaid taxes

10,380

14,937

Deferred taxes

6,216

4,816

Prepaid expenses and other current assets

17,600

14,355

TOTAL CURRENT ASSETS

587,262

570,566

Restricted investments

21,846

21,944

Property and equipment, net

332,637

338,327

Other intangibles, net

14,110

14,434

Goodwill, net

262,759

262,813

Other assets

3,713

4,043

TOTAL ASSETS

$ 1,222,327

$    1,212,127

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$    269,354

$       256,345

Accounts payable other

21,736

21,333

Accrued payroll

16,991

16,192

Accrued other

36,180

43,523

Current portion of capital lease

2,538

2,504

Current portion of long term debt

21,921

19,619

TOTAL CURRENT LIABILITIES

368,720

359,516

Long term debt

76,085

72,460

Non-current liabilities

21,885

22,929

Long term portion of capital lease

15,298

15,937

Deferred taxes

143,386

140,501

STOCKHOLDERS’ EQUITY:

Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2015 and 2014

–

–

Common stock

Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2015 and 2014; 36,062,587 shares outstanding in 2015 and 36,247,324 shares outstanding in 2014

412

412

Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2015 and 2014

7

7

Additional paid-in capital

166,941

171,235

Purchase price in excess of predecessor basis, net of tax benefit of $10,306

(15,458)

(15,458)

Retained earnings

600,085

589,809

Accumulated other comprehensive loss

(74)

(77)

Treasury stock; at cost, 5,162,205 shares in 2015 and 4,977,468 shares in 2014

(154,960)

(145,144)

TOTAL STOCKHOLDERS’ EQUITY

596,953

600,784

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 1,222,327

$    1,212,127

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

March 31,

2015

2014

Cash flows from operating activities:

Net income

$   10,276

$ 12,035

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 

8,731

6,779

Deferred taxes

1,593

1,991

Compensation expense related to share-based compensation plans

2,034

2,143

Gain on sale of assets

–

(6)

Excess tax benefits from share-based compensation

(13)

–

Changes in operating assets and liabilities:

Restricted investments

98

(117)

Accounts receivable, net

2,874

(31,471)

Prepaid taxes

4,557

86

Prepaid expenses and other current assets

(3,246)

(597)

Other assets

330

(837)

Accounts payable

13,414

29,286

Accrued expenses

5,733

1,128

Non-current liabilities

(1,052)

(1,839)

Net cash provided by operating activities

45,329

18,581

Cash flows from investing activities:

Proceeds from sale of equipment

26

85

Purchases of property and equipment

(15,057)

(33,035)

Net cash used in investing activities

(15,031)

(32,950)

Cash flows from financing activities:

Proceeds from issuance of debt

11,480

25,361

Repayments of long term debt

(5,553)

(1,124)

Stock tendered for payments of withholding taxes

(2,754)

(3,023)

Purchase of treasury stock

(13,419)

–

Capital lease payments

(605)

(616)

Excess tax benefits from share-based compensation

42

104

Net cash (used in) provided by financing activities

(10,809)

20,702

Effect of exchange rate changes on cash and cash equivalents

3

–

Net increase in cash and cash equivalents

19,492

6,333

Cash and cash equivalents beginning of period

109,769

68,964

Cash and cash equivalents end of period

$ 129,261

$ 75,297